This blog publishes market news relating to the companies listed in Bursa Malaysia, as well as business news in general. You can search and find all the past market and business news by searching within this Blog.

Friday, August 26, 2011

KLCI falls 1.24% at mid-day, OSK Research hints earnings growth cut

KUALA LUMPUR: ''The FBN KLCI fell 1.24% at the mid-day break on Friday, Aug 26, in line with the tepid sentiment at most regional markets as OSK Research cautioned that its 2012 KLCI earnings growth forecast could be cut.

The FBM KLCI fell 18.20 points to 1,446.54 at 12.30pm, weighed by losses at banking and key blue chip stocks.

The ringgit weakened 0.13% to 2.9905 versus the US dollar; crude palm oil futures for the third month delivery fell RM29 to RM2,965, crude oil slipped 15 cents per barrel to US$85.15 while gold gained US$4.10 an ounce to US$1,778.25.

OSK Research director Chris Eng in his preliminary second quarter 2011 roundup strategy report said he expects his 2012 KLCI earnings growth forecast of 12.8% to be cut in the coming days and maintain OSK Research's Neutral call on the Malaysian market.

He said with investors' attention fixed over the past 3 weeks on the volatile movements in global equity markets, the research house was swinging its focus back onto fundamentals by having an early review of Malaysian corporate results announced thus far.

'What we discover is not pretty with earnings continuing to slide and the Big Caps joining the Small Caps in both disappointments and downgrades.

'The Upgrade to Downgrade ratio has fallen further to 0.45 times with previous stalwarts in the Banking sector also experiencing earnings downgrades. As such, the fall in the KLCI that was earlier attributed purely to sentiment now appears to be gaining a fundamental basis,' he said.

Eng said investors were advised to continue focusing on defensive stocks.